Wix: A Most Improbable Investment

by

The market, as it is wont to do, is currently engaged in a rather enthusiastic sorting exercise. Software companies are being categorized – with the precision of a mildly caffeinated librarian – as either ‘AI Winners’ or ‘AI Losers’. It’s a binary system, naturally, because the universe simply insists on simplicity, even when dealing with the profoundly complex. Wix.com (WIX +4.09%), alas, has found itself rather unceremoniously dumped into the latter category. The prevailing narrative suggests it’s vulnerable to disruption from these new ‘zero-code’ tools, like Claude, which promise to allow anyone – and, frankly, why not anyone? – to construct a website from scratch. (One shudders to think of the aesthetic implications. It’s a bit like giving everyone a printing press and hoping for a surge in beautifully illuminated manuscripts.)

However, a closer examination of the underlying business – a process that, sadly, seems to be increasingly rare – reveals a rather more nuanced picture. It appears the market, in its infinite wisdom, may have miscalculated. Or, more accurately, it’s simply succumbed to the irresistible allure of a good story. (Stories are powerful things. They can move markets, topple empires, and convince people that pineapple belongs on pizza.)

Thus, we arrive at the rather intriguing proposition that acquiring Wix stock – currently down a rather alarming 73% from its recent peak – might represent a once-in-a-decade investment opportunity. A statistical improbability, naturally, but then so is everything.

AI Winner, or Merely Not Entirely Doomed?

Wix’s core business is, fundamentally, the democratization of website creation. It allows individuals, small businesses, and even third-party design teams (those brave souls) to build websites without requiring a degree in arcane coding rituals. Revenue is generated through subscription fees and add-ons, including the essential business of processing payments for e-commerce transactions. (It’s a surprisingly robust ecosystem, really. A digital marketplace built on the foundations of slightly panicked entrepreneurs and the occasional cat meme.)

For a decade, Wix has been a pioneer in ‘low-code’ website building, employing prompts and templates to guide users. Now, with the advent of these AI chatbots, it’s launched Wix Harmony, a ‘vibe coding’ tool that allows users to prompt the chatbot to build a website using Wix’s extensive library of templates. (It’s a bit like asking a particularly efficient genie to construct a digital storefront. One hopes it doesn’t demand three wishes in return.)

Loading widget...

It’s difficult to envision a small business owner abandoning a platform like Wix for a startup like Claude, merely to save a few hundred dollars a year. Especially now that Wix offers all the same tools. (The cost of switching, both financial and existential, is often underestimated.) Furthermore, Wix acquired Base44, a code-based app builder, last year. It was generating close to zero revenue at the time, but is now hurtling towards an annual recurring revenue of $50 million to $100 million. (A truly remarkable transformation. It’s as if they found a hidden lever that controls the flow of digital apps.)

With the proliferation of AI tools, the demand for both websites and mobile applications is increasing. By owning both Wix (for websites) and Base44 (for apps), the company is well-positioned to capitalize on this trend. (It’s a bit like controlling both the ink and the parchment. A powerful combination, naturally.)

Why Wix Stock is, at the Moment, Rather Cheap

Despite this growth potential, Wall Street has deemed Wix an ‘AI loser’. From a high of $240 at the start of 2025, the stock has experienced a rather precipitous decline, currently trading at $66. (A 73% drawdown is not to be sniffed at. It’s enough to give even the most seasoned investor a slight case of existential dread.)

This gives the stock a market capitalization of $3.7 billion. Over the last 12 months, the business has generated $570 million in free cash flow, which equates to less than 10 times the current market cap. Wix is using this cash flow to repurchase shares, with the board authorizing a $2 billion buyback plan. (A rather aggressive move. It’s as if they’re saying, ‘We believe in ourselves, even if the market doesn’t.’)

Combine all of this, and Wix.com stock becomes, shall we say, remarkably appetizing at today’s price. It’s a statistical anomaly, of course. But then, so is everything. And sometimes, the most improbable investments are the most rewarding. (Just don’t tell the algorithms.)

Read More

2026-02-25 13:33